Office of Tax Complication

[Waldorf]

Um, because you've paid CT already on it? That's why it's called a dividend tax credit.

I can however see NICs being added to dividends payments at some point.

I have no doubt the government will tinker and make things worse for all, but it's not going to be "simplification" as per the dictionary definition.

The dividend tax credit was abolished a few years ago. Part of the argument for increased tax on dividends is due to the reduction of CT, I think I can recall CT at 24% for small companies so as it falls to 17% the dividend tax is a means to recoup some of this.

Remember NIC is not payable on dividends but there is an argument that dividends do not warrant a much lower rate of taxation than PAYE.

I agree the whole tax system is a mess and simplification starting with a merger of income tax and NIC would be a great start.

[ladymuck]

Um, because you've paid CT already on it? That's why it's called a dividend tax credit.

The company issuing the dividend pays CT, the recipient does not. You're conflating the tax liabilities of two entirely separate legal entities.

I agree it's double taxation but then where would it end? At present a PAYE worker is taxed at source on their income, then they pay VAT on purchases, fuel and alcohol duty, insurance premium tax, duty on air travel if they dare to want to go abroad for a holiday. It's always tax on top of tax.

True tax simplification would shed a whole lot of light on stealth taxes and no-one has the political balls to do that.

[ChimpMaster]

You might not like it but I’m not sure why you think it is unworkable.

You have to look at it in the context of the public perception of tax dodgers, it is hard to justify paying a high rate of 32.5% against 40% on PAYE.

Um, because you've paid CT already on it? That's why it's called a dividend tax credit.

I can however see NICs being added to dividends payments at some point.

I have no doubt the government will tinker and make things worse for all, but it's not going to be "simplification" as per the dictionary definition.

[WTFH]

I mean like which uneducated jobsworths come up with this kind of stupid unworkable idea.

Angela Knight, ex Tory MP, former head of the British Bankers association.

She was the chief executive of the BBA for a few years and then stepped down just after the LIBOR scandal broke.

[Waldorf]

You might not like it but I’m not sure why you think it is unworkable.

You have to look at it in the context of the public perception of tax dodgers, it is hard to justify paying a high rate of 32.5% against 40% on PAYE.

[ChimpMaster]

https://assets.publishing.service.go...per_May_18.pdf

Page 19 onwards.

Yet more tinkering to destroy the entrepreneurial spirit in not-so-Great Britain.

"A more radical option would be to end the differential tax rates for dividend income. If all taxable income was taxed at the same rates, it would not matter how the personal allowance was used. Making this change would have the effect of increasing the amount of tax due from those who receive amounts of dividend income above the allowance. It would also impact on the taxation of profit extracted as a salary or as a dividend, from family owned companies"

I mean like which uneducated jobsworths come up with this kind of stupid unworkable idea.